Don't work with assholes
danielrsim.com
danielrsim.com
While understandable from his POV, I'm disappointed to see the guy getting paid for services not rendered, and so reinforcing his tactics.
A system where you have to pay bullies because it's cheaper and easier than defending yourself is broken.
For him personally. He complained that the double-asterisk hole acted in self-interest. Then he did the same.
one acted in self interest by effectively paying the other to go away.
your comment is acting in self-interest.
so is mine.
but you don’t really think these all the same. so what point are you actually trying to prove?
a bit different from kidnapping.
or are you saying you always do the right thing? that would be rather incredible.
To us and others it may seem to be a large sum, but to him it was definitely only a pittance of what he intended to take.
I didn't get that from the article - I read it as the broker got his full commission.
In fact, it reads as if the broker got even more than he expected, because the final sale price was 25% more.
I also think there's more to this.
In the event of no contract, winning this is basically one court visit, plus a cost order against the broker.
In the event of a contract that specifies no payment until the deal is closed with the broker's buyer, that's also going to be one court visit with a cost order against the broker.
The only reason to pay him is if the contract said "in the event of a sale" with no further qualifiers. I'm pretty certain it said something along those lines.
Always go with your intuition
"There was a lot of work to do to get the materials together for him. I invested months of time in a back-and-forth with him, with me compiling and developing this information."
ROTFL. Old story. You have an seriously interested buyer? Charge a non-reimbursable upfront payment that will be credited towards the deal, should there be one. This will compensate for the amount of time you have to invest. The buyer bulks. Why? Walk away.
His advices 1 to 3 are excellent. I give you a few more for free
a) It is never too early to walk away from something bad
b) Do you know what is the death of every business deal? Lengthy negotiations
c) If someone uses a word, an expression, a sentence that sounds odd to you. Something that you would not use in this context. Never ever let this slide as a hick up, mistake, or whatever. Always make sure to ask what exactly he means by this. E.g. talking about license deals when talking about a VC investment (don't ask, please don't ask for the story).
Think of it as specialization. Some people are best in the wear-many-hats start up stage where everything is scrappy and there aren't a lot of rules and structure. And if they want the business to continue to grow and prosper, eventually that environment needs to change.
And sometimes people who are good at the startup stage have trouble transitioning into a more mature phase of a business's lifetime. In which case, it's probably more responsible to sell it to someone who can properly nurture it.
This is the part that I don't get either. I can imagine hearing "this coffee shop got better since the new owners", but I know I have heard "this place used to be good until it changed owners". And since the new owners have paid X years of profit which they arguably want to recover in less than X years, it is more than likely that they'll start cutting costs as a result.
So I wouldn't have a reason to believe that a business with new owners would run just as well as before, and in fact I would expect the opposite.
To be fair, I know at least one case of "this coffee shop got better since the new owners", but to be fair, it's because coffee shops are not really comparable to startups - namely because a very unsuccessful café can still hold huge real estate value.
Namely, in this case I'm talking about a café near a city center and a huge office building, but it was very dark, had old moldy sandwiches exposed and mixed low quality coffee with the brand coffee.
As you can imagine, after it was acquired by the new owners they just had to redecorate and sell normal products, and it quickly got packed every day.
Not sure if there's any possible equivalent for tech companies, though.
Building something and maintaining it are two different things which require different skills, different finances and different partners. Innovation requires a curious, scientific mind. Making something profitable requires engineering and an MBA.
Let's say you are an inventor, you just made, say, a new type of coffee maker. You just did some prototypes, worked out the details, made it safer and more convenient, have it make better tasting coffee, considered mass production, etc... You filed the patent and now have a great product on your hands, and now what? Are you going to do value engineering, process scaling, etc... and build your career on that? These are interesting topics, but maybe that's not what you are good at, and you prefer inventing, so you will sell that patent to someone who is more into mass production and optimization and work on your next invention.
Businesses are like inventions, some people prefer and are better at creating new businesses, others are more about keeping things stable and profitable on the long term. The work the founder has done does not necessarily make him better for growing the business and making profits.
This is 100% a concern. If a business is successful because the founder puts in insane amount of work that makes it less valuable to buy.
You ask the question: What would happen if the founders take a multi-month vacation? If the business would keep pumping money, either because it is passive, or because they trained people well and the machine is working without them, then that is a good candidate to buy. If it would fall, or cease to be a business that is a bad business to buy.
But seriously I love building things but support is tiring. I don't build a business to sell them, but I sell a business once I am not passionate enough anymore.
And, at the point that something new grabs your interest, wouldn't you rather let go of that thing you spent years on?
This is why people make businesses to sell - they are looking forward to the next new thing.
Our attempts to outsource that just didn't work: marketing companies are happy to take your money, right up until you require them to meet sales targets.
So we sold, for a pittance really, but I got my life back.
your unfamiliarity with that concept is because you are segregated from the market almost completely in your scientist example, you are subsidized by programs where it’s completely mystical why the funding runs out when it does, as opposed to rapidly iterating on marketable things as a means to an end
I also have a couple of non-profit entities now, those are specially incentivized to dump otherwise sunk cost ideas into, but they are not sunk cost in a non profit. there is no reason to ever do this outside of that structure
privatize the gains, socialize the losses, thats the whole philosophy. it is predicated on actually having gains to begin with.
You do not have to sell 100% of the business.
Money to go do something else.
Now if you turn this around simply pay ass-tacker what he asked for then sue him for having done a bad job on the sale he had no part in but invoiced you for. Since ass-tacker now needs to defend he has to spend money disproportionately. There have to be legal firms that do this service for you.
I've learned to listen to my gut in these situations. The worse your gut feeling is about an agreement, the harder you should push back on it until you can negotiate something that you're comfortable with. I usually give new relationships the benefit of the doubt once. Your first bad gut feeling can be wrong, but I've always regretted moving past a second bad gut feeling.
Be extremely suspicious if your counterpart tries to rush you through a contract negotiation process by downplaying the importance of the agreement while simultaneously refusing to budge on it.
It's called Winning Through Intimidation, and it is a very funny story of how he learned to not get burned in real estate transactions by being prepared for the inevitable tricks people would try to play on him. Short and lots of sage advice.
The writer warned a lot of founders/owners of a problem they might encounter, in many M&A proceedings, which is great.
Also, maybe they wanted to get it off their chest. And getting blog content out of a bad experience is a silver lining.
But I'm skeptical of "love" for the broker. Especially if people who wanted to know who that broker is could figure it out. Then broker might be more likely to call it "libel" than "love".
My current thinking is that sometimes you should dance around some of the details of warnings that come from experience. Vague but honest phrases like "I've heard of" and "I've seen in the field" can help. As can being informed and motivated by first-hand experience, but using second-hand public examples from other instances of the problem, when communicating about the general problem.
What government authority regulates this kind of broker (e.g., is there a fiduciary responsbility?), and investigates conflicts of interest like the one alleged here?
Or is that entirely a civil matter?
If you're going to take the moral high ground, I feel like table stakes are to not have made a ponzi, cryptocurrency, ad network, murder-for-hire, timeshare, or SEO service.
Seems to me like the author signed a bad contract and was forced to comply, even though the services rendered were underwhelming.
If you have a nice open source project, minecraft server, web forum, whatever: get rid of the assholes. Even if they are a highly capable person, in the end it's not worth it. They'll turn off other valuable community members, cause drama, and shift the general atmosphere to the worse.
Sure you can decide to back out sooner, but then you still worked with the asshole if only for a short while.
The real problem is how to identify the asshole, which isn't much of a moral tale but a matter of experience and competence in screening people and attracting good people.
https://en.wikipedia.org/wiki/The_No_Asshole_Rule#Recognitio...
For big deals - known brands etc, I would assume the only way to access those deals is knowing the brokers.
What I learned from this story? You're always the bad guy in someone's story. Specially if this someone has a blog, time to blog and get linked to HN.
The author clearly states the moral to not work with people where the alarm bells are ringing.
You don't know! Just because it is written in the internet, doesn't mean that it is true. That was the only thing that I asked/complained in my first comment. Without any proof, its just a fanfiction. Internet content.
I'm beginning to believe the other comment which accused you of being the unethical broker.
The first is a reality of business. The second is a conflict of interest, immoral, rude, and should be illegal.